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BUSINESS LAW 2: An award of damages for breach of Global Release of Claims

The parties are two companies and their individual owners. Plaintiffs and his company entered into a business relationship with defendants and their LLC.  Plaintiff is a licensed realtor. He agreed to buy and manage properties on behalf of defendant and its clients.  The parties parted ways and forged a “Global Release of Claims” (GRC) without need for a lawsuit. Plaintiffs agreed to pay defendants $65,000, and to relinquish four computers and a truck. In return, defendants released and forever discharged any and all claims against plaintiffs. Defendants also agreed not to institute any action against plaintiffs or file any complaints with any government agency or professional boards. The subsequent litigation stems from this provision.

Despite the Release of Claims unambiguous terms, defendants filed complaints against plaintiffs with the Department of Licensing and Regulatory Affairs (LARA). Plaintiffs responded by filing a lawsuit. The complaint alleged that the Defendants breached the GRC by filing a complaint with the State of Michigan falsely accusing the Plaintiff of embezzlement, fraud and other crimes and requesting damages and sanctions against Plaintiff.

The circuit court granted partial summary disposition in plaintiffs’ favor on their breach of contract claim, and instructed the parties to work out the question of damages. The court also conveyed its willingness to consider an injunction as an element of plaintiffs’ relief.

The parties were unable to come to terms regarding damages or the language of an injunction. During a hearing, both the court and plaintiffs’ counsel acknowledged that LARA might proceed with its investigation even if defendants withdrew their complaints. Plaintiffs’ could have continuing damages if the state did not desist. The court expressed its inclination to enter a preliminary injunction ordering defendants to seek to withdraw the complaint and to conduct an evidentiary hearing regarding the monetary damages based upon the attorney fees, et cetera. Defendants argued that injunctive relief was improper because plaintiffs had already monetized their remedy.

The court responded: They haven’t monetized the future damages should the State proceed and pull the license and say he cannot participate. So I think that what we’re trying to do is mitigate any potential damages by ordering defendants to request a withdrawal of their complaint from the State of Michigan and to enjoin them from further prosecuting this existing complaint. The court’s order ultimately provided: Defendants are hereby ordered to seek withdrawal of the administrative complaint, filed by them, against Plaintiff.

 On a following date, the court took evidence regarding plaintiffs’ damages. At that point, three LARA complaints were open against plaintiffs. The court reiterated that defendants had breached the GRC by filing complaints against Plaintiff, and entered judgment in plaintiffs’ favor for $15,618.95. This sum represented the amount that plaintiffs had paid their lawyers for defending against the administrative complaints up to the date of the judgment.

Many business litigation matters center on complex agreements. If you are a business owner facing litigation, obtaining the right legal representation is essential.

From our law firm in Plymouth, Michigan, we represent business owners throughout Wayne County and the surrounding region who need help with:

  • Breach of contract litigation
  • Shareholder disputes
  • Partnership disputes
  • Ownership disputes
  • Membership disputes
  • Real estate litigation and lease negotiations
  • Employment litigation

Contact Aldrich Legal Services

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